IRS problems arise if you do not file a tax return. The Tax Code has certain timelines or statutes of limitations set out that let the IRS to go after nonfilers.
Criminal: If the IRS finds you within six years of the tax return's deadline, you will be facing criminal charges.
Civil: Civil penalties can be imposed but there are no deadlines. The penalties and interest can be assessed on the taxes you owe forever.
IRS Policy: After six years from the filing deadline, nonfilers aren't often pursued by the IRS.
If you owe taxes and don't file a tax return, it's a crime. You can be fined up to $25000 each year and sentenced to a year in prison for each unfiled year.
If you file your tax return and it states that you owe taxes and do not pay them, there is no criminal penalty. Your tax debt will be subjected to penalties and also accumulate interest, however.
Nonfilers are pursued through:
A program known as Computerized Information Returns Program (IRP) matches information documents against tax returns you have filed. A Taxpayer Deliquency Investigation (TDI) is initiated if no filed tax return is found. You will be contacted with IRS notices, missives, and phone calls, and a revenue officer will inevitably start looking for you.
If you do not respond to 1 of the 4 methods used by the IRS to notify you, others will be tried:
Three written notices from the Service Center within a period of sixteen weeks
A taxpayer service representative will contact you and give you a deadline.
A visit from a revenue officer or agent to give you a deadline and assist you with filing your tax returns (Note: It is legal for the IRS to prepare your tax returns for you.)
Visit from a special agent – undergoing criminal investigation
Instead of putting your head in the sand, why not be proactive? You know your IRS Problems aren't going to go away by themselves. Tampa Tax Attorney, Darrin T. Mish represents clients all over the United States. He can help you get your back tax returns prepared and help you come up with a plan to resolve your IRS Problems for Good! Give his office a call tollfree at (888) 438-6474 for a free, confidential consultation now.